Frequently asked questions and basics for autotrading
What are CFDs and what means CFD trading?
CFDs, or Contracts for Difference, are financial instruments that allow traders to speculate on the price movement of assets without actually owning them. Essentially, a CFD is a contract between a trader and a broker where they agree to exchange the difference in the current value of an asset and its value at contract time. They can be used to trade a variety of markets including stocks, commodities, currencies, and indices. It’s important to note that CFD trading carries a high level of risk and may not be suitable for all investors.
What means CFD trading? How to trade CFD with IG
What is automatic trading?
Automatic trading, also called algorithmic trading, robotic trading, quantitative trading or simply algos, is where computer algorithms make and execute trading decisions without human intervention. This approach contrasts with manual or discretionary trading, where individual traders make decisions based on their judgment.
Key features and benefits of automatic trading include:
- Programmed Strategies: At its core, automatic trading involves programming specific entry, monitoring, and exit criteria for trades. This is often based on a combination of technical indicators, market conditions, and other predefined criteria.
- Versatility: Virtually any manual strategy that relies on indicators or specific conditions can be transformed into an automated one, expanding the range of strategies a trader can deploy.
- Emotion-Free Trading: Robots operate devoid of emotions. They don’t experience fear, greed, or bias. This means they execute strategies consistently without being swayed by psychological factors that might affect human traders.
- 24/7 Operation: Robots don’t need to sleep or take breaks. They can monitor multiple markets, analyze various product types, and assess many indicators simultaneously. This continuous operation can capitalize on opportunities that might be missed in manual trading.
- Diversification: With automatic trading, running multiple strategies across different markets at the same time is feasible, enhancing diversification and potentially spreading risk.
While automatic trading offers many advantages, it’s essential to remember that no strategy guarantees success. Embracing automated trading can open up opportunities, allowing traders to maximize their potential in the ever-evolving financial markets. With the right strategies in place, the future of trading looks promising!
Do I need prior experience? Will I be able to operate the systems correctly?
While we recommend having a foundational understanding of trading to grasp the core concepts and operations, it’s not a prerequisite to managing our systems. Familiarity with trading can help set realistic expectations and understand the nuances of risk, but we’re here to guide you every step of the way.
Key points to consider:
- Ease of Use: No prior experience with the ProRealTime platform or trading robots is necessary. The platform is user-friendly, and we offer comprehensive support to ensure you’re comfortable navigating it.
- Support and Guidance: We provide robust support through detailed instruction pages and direct communication channels. Whether you’re a novice or a seasoned trader, we’re here to assist.
- No Need for VPS or Virtual Machines: There’s no requirement to maintain or invest in a machine that runs around the clock. ProRealTime operates the systems remotely on their dedicated servers, eliminating the need for constant local monitoring.
- Cost-Efficient: The ProRealTime platform can be accessed for free for most individual users. There’s no need for additional data sources, VPN connections, or any hidden costs.
- Accessibility: You can access your ProRealTime platform and account from any computer without the hassle of local installations.
Our systems are designed to be straightforward and accessible, ensuring that even those new to trading can confidently navigate and make informed decisions.
Can I trust CFD AutoTrading?
In today’s digital age, the internet and social media are rife with scams, fabricated testimonials, deceptive profiles, and haters (most times, from the competitors). The ease with which one can purchase followers or incentivize positive reviews has muddied the waters of genuine feedback. We acknowledge that the realm of automated trading systems has its share of dubious providers.
However, here’s what sets us apart:
- Genuine Passion: Crafting automated trading systems isn’t just our profession; it’s our passion. We pride ourselves on developing top-tier systems that stand out in the market. We could distribute indicators (easier from a vendor’s point of view because no one suspects the product is a scam, nor expects it to magically make them rich), but we only distribute systems, which is what we like to do.
- Integrity Over Hype: We’ve chosen to distance ourselves from the noise and deception prevalent online. Instead, we focus on being transparent, honest, and providing our clients with the foundational knowledge they need to set realistic expectations and understand risks.
- Empowerment: We aim to equip you with the correct information to make informed decisions. We’re here to support and guide, not to dictate.
- Track Record: Our products speak for themselves. Their quality and reliability have been the cornerstone of our sustained business and customer trust.
- Legitimacy: Beyond our commitment to transparency, we are a registered company (request your invoice, no problem) and an official professional provider for the ProRealCode Marketplace.
Our unwavering commitment to honesty, quality, and customer empowerment truly defines us. We invite you to experience the difference firsthand.
How do I calculate broker margins and the required equity?
Drawdowns, or temporary declines in a trading account, are a natural part of the trading landscape, also on autotrading. Understanding and anticipating them is essential to ensure you’re not prematurely forced out of the market. Proper portfolio sizing can help weather these drawdowns, allowing you to benefit when your trading systems recover and continue generating profits. It’s a challenging phase, but with the proper preparation, you can navigate it successfully.
For those looking to start with our systems, an initial investment of 1.500€ is recommended. However, the appropriate contract size can vary based on individual circumstances. We encourage you to reach out to us so we can provide guidance tailored to your specific situation, allowing you to take your own decision based on the necessary knowledge.
Is the licensing fee high?
While no one can guarantee future returns, our track record speaks for itself. Historically, our systems have often covered the licensing fee multiple times over. On average, with the default sizing, our monthly profits have ranged from 3 to 10 times the licensing fee.
It’s worth noting that these figures are before any potential discounts. Furthermore, the results displayed are scalable and can be adjusted based on the number of contracts you choose. This flexibility ensures that our licensing fee offers genuine value.
Many of our clients have seen consistent profits over time. However, it’s essential to approach trading with patience and prudence, ensuring you don’t take undue risks when configuring your portfolio size.
What are the Differences Between BackTest, DEMO Servers, and REAL Servers in Trading?
Understanding the differences between BackTest, DEMO servers, and REAL servers is crucial in automated trading. Backtesting allows traders to simulate how a trading strategy would have performed in the past. However, the results from backtesting are not always identical to real-world trading due to various factors. For instance:
- Spread Configuration in Backtest: Robots are often set up to run backtests with the maximum possible spread for a given time frame. This approach ensures that the simulation results are more conservative than actual trading outcomes.
- DEMO Server Limitations: While the DEMO platform is generally stable, it may occasionally experience minor delays or glitches. Sometimes, a robot might even need to be restarted on a DEMO server.
- Real Market Execution: In a REAL trading environment, the execution of orders is influenced by market dynamics. Factors like order matching, potential market gaps, and slippage can cause slight variations in order execution times and prices.
Despite these differences, the variations are typically minor in the context of broader trading ranges. For example, a trade intended to execute at a specific time and price might experience a slight delay and a minor price difference. However, in strategies where stop-loss or take-profit levels are set with a wide margin, these minor discrepancies are unlikely to significantly impact the trade’s outcome.
In conclusion, while there are inherent differences between BackTest, DEMO, and REAL servers, understanding these nuances ensures that traders can make informed decisions and set realistic expectations for their automated trading strategies.
What is DrawDown and How Do Our Robots Manage It?
DrawDown refers to the decline in capital from a peak to a trough during a specific period, usually represented as a percentage. It’s an essential metric in trading as it provides insight into the potential risk and volatility of an investment strategy.
In the context of our robots, we’ve integrated a specialized capital preservation module. This module is designed to automatically halt trading activities if a significant DrawDown occurs. The primary purpose of this feature is to safeguard your investment, especially during unexpected market events. For instance, if you’re away on vacation and a significant market shift occurs, our robots ensure that the DrawDown doesn’t severely impact your portfolio. This proactive approach gives you peace of mind, knowing that your investments are protected even when you’re not actively monitoring them.
New IG broker accounts: Limited risk accounts problem with the trailing stop and its solution
If your IG broker account was recently created or has not launched a few manual positions, you may have a “limited risk account”. IG creates the accounts limited by default, to reduce the potential risk of non-experienced traders.
For AutoTrading, you can get errors like “trailing stop is not compatible with your account” or “trailing stops are not allowed in limited risk accounts” when sending the trading system to the ProOrder module.
To solve it, contact IG customer support (preferably by phone) to “unlock” your account, and remember to restart ProRealTime after it.
Do you need more information? Are you interested but you don’t know how to start? Don’t hesitate to contact CFD AutoTrading staff.
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